CANADAOfficial Journal of the Canadian Independent Adjusters’ AssociationJournal Officiel~ Canadienne des Experts Indépendants

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Managing HazardousMaterials DuringDemolition andReconstruction:The Claims Perspective

BY MATtHEW R. ALLEN

Whether resulting from wind, fire or waterdamage, insurance claims often involve thedemolition, reconstruction and restorationof buildings and property. Insurance companies and adjusters often take on the taskof initiating and managing the related contractor restoration and reconstruction activ

ities. In so doing, they may take on the equivalent role ofthe owner in that they may tender, contract and administer payment of contractors directly. Along with this role comessome important regulatory compliancerequirements and responsibilities withinthe province of Ontario (and otherprovinces that insurance and claimsprofessionals must be aware of. Failureto undertake the necessary pre-demolition and reconstruction surveys of hazardous materials, asbestos in particular,can create exposure to potential liabilityand legal penalties for those involved.

Under Section 30 of the Ontario Occupational Health and Safety Act’, designated substances and other potentially hazardous buildingmaterials must be identified prior to construction or demolition activities that could potentially disturb such materials. The regulated designated substances include: asbestos,lead, mercury, silica, isocyanates, vinyl chloride, benzene,acrylonitrile, coke oven emissions, arsenic and ethyleneoxide. Of these eleven, the most common concerns in modern buildings are asbestos, lead, mercury and silica.

Specifically, the Act mandates that the project owner prepare a list of identified designated substances, generally inthe form of a survey report. A copy of the report must beprovided to the general contractor in advance of the initiation of the subject work. The general contractor must inturn submit the report to all subcontractors and tradesprior to work being initiated.

Additional regulatory requirements must be met for themost rigorously controlled designated substance: asbestos.Regulation 0. Reg. 278/05 — Asbestos on Construction Pro-

jects and in Buildings2 applies to the disturbance of asbestos-containing materials (ACMs) on construction projects.Similarly, the regulation requires that owners arrange foran examination of the building or project area to establishwhether any material that is likely to be handled, dealt with,disturbed or removed is asbestos containing.3 This mustalso be presented in report format including drawings,plans and specifications as necessary and is generally includ

ed as a subset of the full designated substance survey report. Third party professional (consultant) resources are generallyretained for such survey and reportingactivities given the special health & safetyprecautions and environmental and materials expertise involved.

Failure to carry out this critical regulatory requirement can carry with it significantconsequences under the Act. An owner whofails to comply is liable to the general contractor and every subcontractor who suffersany loss or damages (including injury as aresult of the subsequent discovery of a designated substance that the owner ought rea

sonably to have known of but that was not reported.It is therefore essential that property loss adjustment and

insurance professionals incorporate this critical step intotheir claims resolution timeframes and budgets. It is alsokey that environmental engineering resources are engagedearly for greatest effect and to avoid costly delays once workis underway. 4

Matthew R. Allen is a principal with Giffin Koerth Forensic Engineering, where he leads the environmental, health &safety group. Allen is a professional chemical, materials &environmental engineer with more than 12 years ofexperiencein the assessment and management ofenvironmental contaminants and hazardous materials.

1. For full Act visit www.e-laws.gov.on.ca

2. For full Regulation visit www.e-laws.gov.on.ca3. For Guide visit www.labour.gov.on.calenglish/hs/pubs/asbestos

Failure tocarry out this

critical regulatoryrequirement

can carry with itsignificant

consequencesunder

the Act.

26 Claims Canada February/March 2010 www.claimscanada.ca